Suriname Could Be Latest Big Oil Find as Industry Cuts Costs

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Suriname Could Be Latest Big Oil Find as Industry Cuts Costs

Suriname, Guyana and Brazil are now attracting more new investment than the Gulf of Mexico and other more established oil fields. And they are helping to keep global oil prices relatively low, undermining efforts by Russia and its allies in the Organization of the Petroleum Exporting Countries, like Saudi Arabia, to manage global supply and push up prices.

In Guyana, oil companies have found more than 10 billion barrels of probable reserves of accessible oil and gas offshore, according to IHS Markit, the energy consulting firm. Production began in 2019 and is ramping up quickly. Guyana already accounts for one of the top 50 oil basins worldwide, according to consultants.

Suriname has at least three billion to four billion barrels of reserves, energy experts said, or up to half the new oil and gas discovered around the world last year.

But exploiting those reserves in a way that benefits its people could prove a challenge for Suriname, a former Dutch colony that has been politically volatile and governed for much of the last 40 years by Desire Bouterse, a former army sergeant who took power in a coup. In 1999, a court in the Netherlands convicted Mr. Bouterse of drug trafficking. In 2019, a court in Suriname convicted him for the 1982 murders of 15 political opponents and sentenced him to 20 years in prison. He lost an election and retired last year, but has not been sent to prison.

The new president, Chan Santokhi, a former police chief and justice minister, faces many challenges, including the coronavirus pandemic and a fiscal crisis. The unemployment rate last year was 11.2 percent, and inflation is extremely high; the I.M.F. expects consumer prices to jump nearly 50 percent this year.

Oil and natural gas exploration could easily lift the country of about 600,000 people, roughly Milwaukee’s population, out of poverty if Mr. Santokhi’s administration makes the right moves. But history is replete with examples of countries that failed to properly manage energy and mineral riches, a phenomenon economists call the “resource curse.”

Source: New York Times

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